It was a landmark week for the South Korean Kospi, which briefly topped the 5,000 level for the first time. Although it settled slightly lower, the index remains a beacon of strength in the Asian region, climbing 0.6% on Friday. This surge reflects a broader optimism that the global tech and manufacturing sectors are weathering the current political storms.
In Japan, the Nikkei 225 edged higher after the Bank of Japan held its policy rate at 0.75%. The BoJ’s upgraded growth and inflation forecasts suggest that the Japanese economy is on a sustainable path, even if more rate hikes are looming. The calming of the bond market—where 40-year yields had previously spiked—has also provided much-needed stability.
Chinese markets joined the upward trend, with both the Hang Seng and the Shanghai Composite posting 0.3% gains. Investors in the region are taking cues from the U.S. recovery, specifically the easing of tariff threats. As the “TACO” effect takes hold in Washington, Asian exporters are breathing a collective sigh of relief.
Australia and Taiwan also saw positive movement, with the Taiex jumping 0.8%. The steady hand of central banks across the region, combined with resilient U.S. consumer data, has created a favorable environment for equities. The only outlier was the Sensex in India, which remained largely flat.
The region’s focus now shifts to the sustainability of this rally. With the Japanese Yen weakening and gold prices remaining high, there is an underlying sense that while the current growth is welcome, the risks of inflation and debt remain very real.